Taxpayer First Act

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The Taxpayer First Act of 2019 refers to two bills introduced in the 116th United States Congress.

First version[edit]

The first Taxpayer First Act of 2019, H.R. 1957 was written to modify numerous policies at the IRS concerning "organizational structure, customer service, enforcement procedures, management of information technology, and use of electronic systems." Among the provisions affected:

  • establish the IRS Independent Office of Appeals to resolve federal tax controversies without litigation;
  • require the IRS to develop a comprehensive customer service strategy;
  • continue the IRS Free File Program;
  • exempt certain low-income taxpayers from payments required to submit an offer-in-compromise;
  • modify tax enforcement procedures that address issues such as the seizure of property, issuing a summons, joint liability, referral for private debt collection, and contacting third parties;
  • establish requirements for responding to Taxpayer Advocate Directives;
  • permanently authorize the Volunteer Income Tax Assistance Matching Grant Program;
  • modify procedures for whistle-blowers;
  • establish requirements for cybersecurity and identify protection;
  • prohibit the rehiring of certain IRS employees who were removed for misconduct;
  • allow the IRS to require additional taxpayers to file returns electronically; and
  • increase the penalty for failing to file a return.

The legislation also addressed identity theft protection and taxpayer rights during an income tax audit,[1] directed the department to hire a Chief Information Office, as well including a provision that will establish the IRS Independent Office of Appeals to resolve federal tax controversies without litigation.The bill was reported to have bipartisan support, and passed the House of Representatives by voice vote on 9 April 2019[2]; passage was praised by the American Institute of Certified Public Accountants.[3]

However, the bill was criticized in news media as being overly biased in favor of for-profit tax filing services. In particular, a provision in Sec. 1102(a)(4) called for the IRS to "continue to work cooperatively with the private sector to provide the free individual income tax preparation and the electronic filing services described in paragraphs (2) and (3)."[4] This was interpreted by critics as banning the IRS from creating its own free tax preparation software. Notably, an investigation by ProPublica showed that companies which stood to benefit from the Free File provision, such as Intuit (producer of TurboTax) and H&R Block, often steered taxpayers whom are eligible to file for free into using cost-associated services to file their taxes. The ProPublica report stated "just 3% of eligible U.S. taxpayers actually use the free program each year. Critics of the program say that companies use it as a cross-marketing tool to upsell paid products, that they have deliberately underpromoted the free option."[5]

As a result, congressional action on this version of the bill stalled in the Senate.

Second version[edit]

A second version of the Taxpayer First Act of 2019, H.R. 3151, was passed in the House by voice vote on 10 June 2019 with the sponsorship of original sponsor Rep. John Lewis. This version dropped the Free File provision from H.R. 1957[6]. The modified bill had the support of Sen. Chuck Grassley, and was subsequently passed by the Senate by voice vote on 13 June 2019.[7] President Trump signed it into law on 1 July 2019.[8]

See also[edit]

References[edit]

  1. ^ Tompor, Susan (April 10, 2019). "Shouldn't it be easier — and cheaper — to do your taxes?". Detroit Free Press.
  2. ^ "Congressional Record". www.congress.gov. Retrieved 2019-12-02.
  3. ^ Cohn, Michael (April 9, 2019). "House passes IRS reform bill". Accounting Today.
  4. ^ Lewis, John (2019-04-29). "Text - H.R.1957 - 116th Congress (2019-2020): Taxpayer First Act of 2019, Sec. 1102(a)(4)". www.congress.gov. Retrieved 2019-12-02.
  5. ^ Elliott, Justin (April 9, 2019). "Congress Is About to Ban the Government From Offering Free Online Tax Filing. Thank TurboTax: A bill supported by Democrats and Republicans would make permanent a program that bars the IRS from ever developing its own online tax filing service". ProPublica.
  6. ^ "Congressional Record". www.congress.gov. Retrieved 2019-12-02.
  7. ^ Lewis, John (2019-07-01). "Actions - H.R.3151 - 116th Congress (2019-2020): Taxpayer First Act". www.congress.gov. Retrieved 2019-12-02.
  8. ^ https://www.whitehouse.gov/briefings-statements/statement-president-h-r-3151/

External links[edit]